Minority Home Ownership and the WOW Initiative

MINORITY HOME OWNERSHIP AND THE WOW INITIATIVE-HON. DANNY K. DAVIS (Extensions of Remarks - February 26, 2004)

HON. DANNY K. DAVIS
OF ILLINOIS
IN THE HOUSE OF REPRESENTATIVES

THURSDAY, FEBRUARY 26, 2004

Mr. DAVIS of Illinois. Mr. Speaker, I rise today to address the importance of homeownership in our country; the difficulties that many Americans have becoming homeowners; and the financial strain put on Americans, particularly minorities, when seeking reasonable housing options.

Homeownership is an effective way for Americans to establish wealth and solidarity for their families. More should have the ability to pass homes from generation to generation, with the comfort and knowledge that home is more than a roof over one's head, but that home is a possession. Most consider purchasing a house a major investment, perhaps the largest that one will ever make, but to many it is more than an investment; it is the first step in achieving the American Dream. Families that own homes are entitled to an added sense of pride and a feeling of belonging to a neighborhood or community.

We should strive for all families to have the means necessary to become homeowners and to live comfortably. The fact that homeownership is unrealistic for so many Americans is disheartening. Homeownership has proven to be a tremendous difficulty for a large number of Americans. As housing has gradually become less affordable, families are struggling to pay their rent, let alone mortgage. Housing is considered affordable when a person spends less than 30 percent of their income on rent or mortgage, but contrastingly 4.9 million Americans spend more than 50 percent of their income to remain in their homes. In Illinois, nearly 420,000 renting families, about 30 percent of the total number of renters spend more than 35 percent of their income on rent, 258,000 spend more than half of their salaries on rent; as a result many do not consider home owning an option when apartment living is a struggle in itself. Subsequently, of the Illinois residents who have been fortunate enough to purchase homes, 370,000 of them are spending more than the affordable rate of 30 percent, which is a 38 percent increase from 1990 to 2000.

Financial stress due to housing costs has become an incredible burden in the United States. Unfortunately the frustration shared amongst all Americans occurs at an increased level for minorities, particularly African Americans. African Americans lag behind the U.S. population 48 percent to 68 percent in homeownership. The great wealth gap between African Americans and the rest of the nation creates varying levels of housing affordability, thus what is affordable to some is not affordable for others. In the Chicago metropolitan area alone, there are 850,000 individuals living at or near poverty. For Americans whose everyday reality is grim and discouraging due to lack of financial resources; for Americans who are overlooked despite their hard work; the means to live comfortably are unattainable unless a considerable increase in affordable housing is made.

The Congressional Black Caucus Foundation has joined with many partners and sponsors including Habitat for Humanity, Fannie Mae, and Freddie Mac to stride towards a resolution for the homeownership gap where African Americans, other minorities and low-income families are receiving the short end of the stick. The With Ownership, Wealth Initiative (WOW), was created several years ago to give African American families an opportunity to build wealth through homeownership. The Initiative recognized the rates of African American poverty and homeownership as significantly imbalanced with those of Americans as a whole, and in turn set forth to begin closing the gap. WOW offers credit counseling, housing counseling, home buying assistance and other resources which help families to get on a track that will lead to ownership. After participating in events organized by the WOW Initiative, I am proud to report 200 preapproved mortgages and 103 actual closings in the Chicago area. I commend the CBCF, WOW and its partners for understanding the urgent need to ensure housing affordability for minorities and low-income families. Further, I applaud their success leading families a step closer to our American Dream.

Mr. Speaker, I would like to stress the need for affordable housing for all Americans and further I would like to emphasize the importance of WOW and other programs which share similar goals. These programs along with an end to drastic cuts in funding for housing and the development of more affordable homes are an absolute necessity to aid our country in its current housing crisis.

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